GSIB status and corporate lending: An international analysis

Hans Degryse, Mike Mariathasan and Thi Hien Tang

No 15564, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Global Systemically Important Banks (GSIBs) benefit from implicit government guarantees but face additional capital requirements and oversight. This paper examines the effectiveness of the Financial Stability Board’s recently introduced GSIB-framework and its short-run implications for the real economy, by exploiting the leak of a partially accurate GSIB list by the Financial Times. We find that GSIB-designation reduces the supply of syndicated loans to risky corporate borrowers by 8%, and that these borrowers experience lower asset-, investment- and sales growth than similar firms borrowing from non-GSIB banks. The results appear to be driven by stricter supervision, not by higher capital surcharges.

Date: 2020-12
New Economics Papers: this item is included in nep-fdg
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